INCON: 'Pushing wheel until it picks up moment'

Dubai: Gilbert Ashram established INCON (www.incon.ae) as a contracting company in 2008.

What is INCON?

INCON is a contracting company that plans and builds infrastructure. We have the capability of managing the infrastructure that we plan and build. INCON currently focuses on 3 sectors — Electrical, Mechanical and Telecom. As an example we plan, procure, supply, build and manage 33 kVA electricity distribution infrastructures. In the telecom industry we have executed contracts to connect remote areas with fibre optic cables. INCON is also an approved mechanical contractor for infrastructure for the industrial sector.

Where did the idea of INCON emerge?

I started my career with Consolidated Contractors Company (CCC) gained experience in doing infrastructure work. I realised that large projects were broken into smaller contracts by main contractors. The main contractors focused on executing most important elements of contract and outsourced the others. Infrastructure projects were being usually outsourced to specialised subcontractors. As I gained experience an opportunity presented itself in 2008 to provide services to the contractor executing the Dubai Metro. We developed the business on top of this prestigious work; after which we became approved as a contractor for du, etisalat and so forth.

Where was the seed of entrepreneurship in you?

I suspect it was dormant. Twice in my work career I managed to increase the size and scale of business I was assigned responsibility for. I began to think that if I could do it twice then I could do it for myself. I also got the confidence based on the diversity and quality of work experiences, both site and project management. With CCC I used to be assigned a site where I managed people to implement projects. I used to wonder, “If this was work then I could do it for myself.” CCC took me to the first turning point. After CCC I worked for a trading company managing suppliers. I had worked in remote project sites e.g. Ruwais. It took me 6 months to understand how trading works in a city. I felt like a villager coming to a city and discovering new things. The GM of the company was a shrewd business person. He inspired me to learn commercial aspects of business. I learnt the business that underpins work. Those 2 years were a second turning point. I went back to a construction firm, worked directly with the owner, and expanded the contracting division, from a handful of persons to a few hundred. This tempted me to be on my own, work a business as per my own plan.

Explain?

As an employee I was often required to work as per ideas / plans of others. I wanted to implement my own ideas, build a business as per my plan, how I felt it as suitable. I guess expressing my creativity.

After starting INCON how did you go about pitching for business?

I leveraged my network. I had to create a jobs list. I used my network to get jobs and again used my network to do the job because I did not have resources. I had relationships with people with whom I had worked for many years. Some were prepared to support me with small and risk free trial projects. Risk here refers to the personal and professional risk they took supporting an untested newbie. They promised to give me bigger projects if I delivered on smaller projects. I was looking for such opportunities. My plan was to deliver the projects using resources by affiliating with bigger partners. But the plan worked differently. As soon as I got the first job, we immediately got our resources and started making money. We started with the company that did the Dubai metro. du, etisalat, the army, and the Municipality followed.

Example?

The first job was a very small job — Dh75,000. I was told, “Gilbert you do this one. We may require more work after a year.” When we did that in good time, we were given another one, valued at Dh1m.

The first job was as a subcontractor to the main contractor. Within 3 or 4 months of the first job we began taking jobs directly establishing INCON as an independent contractor.

Contracting requires capital — requirement in terms of performance bonds, bid bonds, advances to subcontractors etc. How did you manage this?

I injected capital and managed the cash flow. We had the support of the client who knew that we were a new company. Similarly the suppliers were a part of the network and were willing to give us credit facilities. Things fell into place the proper way from the beginning. I can modestly say that the business got built around my personal credibility.

How did the family respond to your becoming an entrepreneur?

They believed in me and supported me. They did not doubt me. It was a new company but we had a plan. We were not chasing an idea, incurring expenses, and waiting for customers to buy and then pay. They knew I had developed businesses. They also knew that businesses take time to become financially sound. I don’t want to make it sound logical and give a feeling that there was no risk involved. Starting was a big risk. My GM, joined me because he trusted

When did you start increasing headcount?

We started with 20 people. In the first phase we hired smaller numbers giving subcontracts to others. We started adding people when we got approved by du. We are now around 150 in UAE.

Has the nature of your business changed with growth?

INCON has always been in the turnkey infrastructure business. We have been adding new teams that support the main business doing related works servicing all the requirements in-house. We are also serving new markets. We intend to do MEP works for commercial and residential projects. This is very different from industrial projects, our original market, requiring lots of resources — planning, staff (engineers, draftsman and coordinators), and procurement.

Has this evolution been driven by the customer asking INCON to do additional work, the customer helping you grow the business?

We have grown with the support of our customers. This happened with JT Metro. It is happening now with the Army, DU and others. We did an infrastructure job for du in the Dubai region. They extended it to Abu Dhabi.

How is INCON growing?

We have diversified our activities and market segments. We have grown geographically, first to Abu Dhabi and now Doha. As we are growing our client base is expanding. Once in a new region like Abu Dhabi we search for sectors where we think we can add value e.g. we are exploring options in the Oil and Gas sector. In Doha we are venturing into commercial and residential work.

Challenges of the last 7 years?

Financial challenges are the most difficult to manage. We have to execute and collect. But before that we must have the facilities to start the projects on schedule. Since we are a small company every delay, and sometimes resulting cash flows make it difficult to start another project. We have to grow because we are a small company and many members of the crew have joined us from large companies to grow.

Size of current contracts?

4 to 5m each.

How do you balance your time — identifying new opportunities versus execution of the contracts?

I focus more on business development now. We have managers dedicated in every geography managing project execution. Managing cash flow takes a good part of my attention at this stage as I am developing Abu Dhabi, Doha and Dubai.

Why do clients work with INCON?

We are an execution company. But we don’t just execute. We have the know-how to improve designs given to us by clients as we execute. Sometimes when we reach a remote site the design given by the client is unworkable. We then provide them better solutions. Our bonhomie with the clients is such that we give feedback, brainstorm, and sometimes even argue with them trying to convince them of our ideas. This approach of ‘partnering’ clients has paid us dividends in more contracts.

Any special way you have organised?

To be a ‘quick’ execution company I have had to delegate certain authority to my managers to allow them latitude and authority in decision making. They can react to emergencies to meet urgent client requirements. We learnt the need for this early in our work when we faced challenges with clients like the Army, Metro or DU. Working in this manner gives us credibility with clients. Any company can provide contracting but there are certain values that will differentiate companies from others.

You sound relaxed about INCON?

I took my last real holiday 10 years ago. I do take off for a week but when I am away the mind drifts back after 24 hours. It is always working. Not that anything is urgent that requires my attention. But I just want to be in the middle of the action.

Does anything stress you about the business?

Now it is positive stress. I want to be better at what we do. I am not worried about failure. I am impatient to see where we will be after 10 years. I discount work related stress. It is a part of day-to-day problems of contracting. It was not always like this. In the beginning adequacy of financial resources was a challenge and stressful. Things have improved and I can feel the wheel turning. I have realised that a businessman has to keep the wheel turning until one feels the wheel turning on its own.

Challenges to growth?

Recruiting right talent. This is a continuous process. We have made errors but corrected them quickly. If we had the right talent the company would pick a momentum of growth on its own. And after we get the right people giving them a good vision of INCON.

I will give you the positive example of Doha, what a good team can do. We created a team whose first contract was Dh6 million. They are now negotiating an Dh20 million contract. I go to Doha every two months. And the revenue is double that of Dubai.

Did you discounts to win contracts?

Yes in the beginning. I was taking time to understand how pricing was going to work for a new business and developing ideas of penetrating in the market. Penetration required discounting.

And now?

I am winning contracts based on service proposition. My pricing has got better.

How long did it take you to understand the cost structure of your company?

It took us first 18 months because we were growing quickly and needed time to stabilise, to consolidate.

Have you changed as a person in your entrepreneurial journey?

I look at things differently. I am more tolerant about challenges and mistakes. I made mistakes on my entrepreneurial journey. I sometimes feel that I take a ‘bigger’ and ‘different’ perspective of issues facing the company than others.

When did you start drawing a salary from the business?

I took a salary after 2 years of stating up. We were growing and I was reinjecting every penny into the business. We are still growing in Qatar and I am still reinvesting. Our revenues dropped during the recession because we work with the Governments and they had bigger challenges. This is when diversification to Abu Dhabi and Qatar happened.